Independent Healthcare is Worth Fighting For
My response to the AMA’s “8 threats facing physician private practice”
By Kate Othus, MHA
When the American Medical Association (AMA) starts publishing articles identifying specific threats to private practice, we should all sit up and take notice because the decline of independent healthcare impacts all of us. As the CEO of a company that was founded on the premise that independence in healthcare is worth fighting for, I understand the urgency and the obstacles doctors are facing. Our focus is not limited to recognizing the problems, but most importantly to finding solutions that will keep patient care in the hands of providers, not corporations. Allow me to elaborate.
Recently, the AMA released the article “8 threats facing physician private practices” and it was jaw dropping. Not because any of this was news to me but because the exact problems HPA has been battling are finally hitting critical mass. In fact, there have been several articles lately that are raising the alarm about the decline of private practice. While I love seeing some overdue attention being given to these issues, I cannot help but notice that most of the articles fail to offer any advice on how to mitigate the effects of rising consolidation trends.
I decided to directly respond to the AMA piece with five specific solutions to threats facing private practice to show owners that they are not alone in this and to offer up tangible next steps. There are organizations like mine, Health Professionals Alliance, that are fighting right along with you. We have your back and are on a mission to help ensure that private practices not only survive but thrive.
Rising Administrative Burdens
As a former healthcare administrator, I know all too well about the increased operational burdens that have befallen every private practice. Heavier state and federal regulatory requirements combined with the time-consuming back and forth between office managers and participating agencies make some essential tasks a full-time job all on their own. Add to that the labor shortages that are impacting healthcare at every level and you have costly missed opportunities that can lead to compliance issues. Common administrative burdens include but are not limited to:
- HIPAA compliance
- Obtaining authorization to provide services
- OSHA regulations
- Complying with: Stark laws, Anti-kickback laws, MACRA
- Maintaining a referral program
It is common – and I’d argue essential — for every practice to outsource some tasks. Not only does finding a reputable partner create greater efficiencies in your operations, leading to a larger revenue stream, but it also saves labor expenses. HPA goes a few steps beyond what a traditional service agency can offer. Our members get significant discounts from dozens of contracted service partners and many in-house consulting hours like strategic planning or building a 3-year business plan are included in the membership. For our equity members, they get the added benefit of being an owner in the company they are outsourcing to, so beyond the obvious boost to their practice, they are adding value to a separate appreciating asset. This is not something any other company can offer.
Low and Falling Payment Rates
Many independent practices have been dealing with declining reimbursements from payors for a variety of reasons. There is a misperception that being associated with a larger health entity results in higher pay rates for the same services. Medicare, Medicaid and commercial insurers do what they can to minimize their pay outs, but a bigger problem is the lack of engagement with value-based contracting opportunities with payors. This can be challenging because value-based reimbursements require healthcare practices to negotiate terms that are dependent on patient outcomes rather than services rendered.
There has been some reluctance from providers to try value-based payouts when they’ve always been driven by service-based compensation. Let’s face it, change is hard! Fortunately, it doesn’t have to be as difficult as it seems with a little expert assistance. Our team at HPA can help your practice in one of two ways. The first is to focus on your individual organization by negotiating directly with payors to find out if there are value-based incentives available and establish the metrics to be measured. Alternatively, we can search for a network of practices in your area to join that have already negotiated group terms, so you don’t have to go it alone. Either way, your organization can start increasing revenue by qualifying for value-based bonuses and compensation without having to invest dozens of in-house administrative hours into the project.
Lack of Negotiating Leverage
Like the threat of falling payment rates touch on, payors are in the business of limiting their expenses just as much as medical practices are trying to maximize their reimbursements. All practices must go through a payor contracting process to collect payment from Medicaid, Medicare and every commercial insurer individually. That means keeping track of multiple contracts, all with different terms and renewal dates. Talk about a daunting task! Many private practices lack the resources to keep up with contract renegotiations and when renewal deadlines pass without any action taken, payors can negatively change the terms without even notifying your team.
Negotiating payor contracts is the single most important thing you can do to improve revenue. And finding help outside your organization can be helpful here, as well. While the ROI varies depending on the particulars of each contract, it is common to get at least 4x the original investment amount back. Our payor contracting service includes organizing all your contracts into a payor matrix that will alert you when a renewal date is approaching and keeps the contact and term information in one place for easy access. We also create a value proposition from your own practice data showing the procedures you most often provide and the positive impact you bring to your patients. This is a great negotiation tool for getting higher reimbursements, but most independent practices don’t have the resources to put together a report like this. When the need arises, we will even take the lead in your negotiations with experts who understand the process from all points of view.
Hard to Get Good Data
When I was a healthcare administrator, the lack of access to good data was a constant problem. Even the most diligent office manager can only do so much with a spreadsheet and multiple sources of data. The difficulty is various healthcare operating systems, including EHRs and accounting software, don’t have the capability to directly communicate with one another. That means someone has to take all those separate reports and manually key in numbers into a spreadsheet. This process is tedious, lengthy and results in already outdated data by the time the report is ready to view.
When I left healthcare administration, it was to start DataDx, a SaaS (Software as a Service) platform designed to link all your practice’s operating systems. Eventually, we formed a partnership with HPA and now I serve as CEO for both companies. All our HPA members receive DataDx as part of their membership which gives them access to a dashboard with real-time data reports. DataDx includes a set of analytics tools for practice benchmarking, anomaly detection and revenue forecasting that is also otherwise unheard of in private practice healthcare. Big health systems have technology personnel to provide good data for their leadership, but independent providers have always been at a disadvantage previously.
Feeling Professionally Isolated
Physicians in private practice do not have the networking capabilities that larger health systems do, and the lack of peer engagement can leave providers feeling isolated. The desire to connect with other independent doctors around the nation with similar practices is common and makes perfect sense. Every business does better when their leadership can share ideas and create relationships with colleagues. Why should independent healthcare be any different? Doctors attend annual conferences which help but don’t exactly facilitate a feeling of community.
This is quite possibly where HPA is most unique and vital for private practice provider owners. Because we are a membership independent doctors exclusively, we actively create that sense of community. Our HPA consulting team and regional managers regularly provide virtual events called Member Roundtables where our members interact and learn from each other. Additionally, we give members an opportunity to hold events at our expense to share our business model with peers. Possibly the most dynamic way we support our HPA community is with our Annual Member Summit where we bring our service partners and members together in a massive networking opportunity. There is no such thing as an isolated physician HPA member. bee
We believe in the independent doctor.
The time to preserve and reinvent the private practice model is now. My team and I are ready to roll up our sleeves and do the hard work against the threats independent doctors are facing today. We are committed to continuing to create new solutions ahead of any new challenges or pressures. And, as part-owners of your contracted service company, we are truly in this together. That is what sets us apart from all other service organizations.
To learn more about how the HPA model can benefit your independent practice, contact us anytime.
About Kate Othus
Kate realized shortly after completing her Bachelors in Exercise Science that she could have a greater impact by earning her Masters in Healthcare Administration from Portland State University. She expanded her expertise by becoming an educator herself. As an adjunct professor at Oregon Health Sciences University (OHSU), Kate taught Strategic Planning and Organizational Development courses within the Healthcare Certificate and MBA programs. Working side-by-side with physicians as a practice CEO and Administrator for various specialty groups, she witnessed outdated and often error prone data repeatedly lead to poor business decisions by providers. Kate carried that experience forward as she transitioned to healthcare business consulting. There she developed a high performing consulting team to serve private practices and formed a personal philosophy that propels her next steps to this day. It’s all about the people who feel valued and are willing to become lifelong learners for the purpose of helping others. When emotions are calmed by data driven decisions and logic can inform the plan, a shared sense of understanding and respect will follow. Building and executing winning strategies, so that doctors can focus on giving the best possible care for their patients, has become monumental to her life’s mission. Now Kate serves as CEO for both DataDx and (HPA) and practices nationwide are better for it.